Capital Gains Tax

Capital Gains Tax Allowances, Liabilities & Reliefs

In the tax year 2018/2019, an individual's CGT allowance is £11,700 (2017/18 - £11,300).

This means you do not have to pay tax on gains from buying and selling shares or other investments during the tax year up to that amount. You do not normally have to pay tax on any gain you make when you sell your main residence.

2018/2019

2017/2018

For standard rate taxpayers(1)

10%

10%

For trustees and higher/additional rate taxpayers(1)

20%

20%

Annual exempt amount - individuals

£11,700

£11,300

Annual exempt amount - trusts

£5,850

£5,650

Entrepreneurs' relief lifetime limit

£10,000,000

£10,000,000

Entrepreneurs' rate

10%

10%

(1). These rates do not apply to transactions involving residential property (the sale of second homes) or carried interest (the share of profits or gains that is paid to asset managers). CGT rates for these transactions remain at 18% (standard rate taxpayers) and 28% (higher rate taxpayers).

If you have used your CGT allowance, don't forget your Individual Savings Account (ISA) allowance. Both a 'Cash ISA' and a 'Stocks and Shares ISA' can shelter capital gains on investments, for example unit trust holdings, worth up to £20,000 per year.

From 6th April 2008 Taper Relief was removed and a new relief called 'Entrepreneurs' relief' was introduced to reduce the Capital Gains Liabilities on the disposal of certain business assets.

CGT is a tax on capital 'gains'. If when you sell or give away an asset it has increased in value, you may be taxed on the 'gain' (profit). This doesn't apply when you sell personal belongings worth £6,000 or less or, in most cases, your main home.

When do I have to pay CGT?

You may have to pay CGT if, for example, you:

sell, give away, exchange or otherwise dispose of (cease to own) an asset or part of an asset

receive money from an asset - for example compensation for a damaged asset

You don't have to pay CGT on:

your car

your main home - provided certain conditions are met

ISAs

UK Government gilts (bonds)

personal belongings individually worth £6,000 or less when you sell them

betting, lottery or pools winnings

money which forms part of your income for income tax purposes

Important Considerations:

if you are married or in a civil partnership and living together you can transfer assets to your husband, wife or civil partner without having to pay CGT

you may not give assets to your children or others or sell assets to them cheaply without having to consider CGT

if you make a loss you may be able to make a claim for that loss and deduct it from other gains, but only if the asset normally attracts CGT

if someone dies and leaves their belongings to their beneficiaries, there is no CGT to pay at that time - however if an asset is later disposed of by a beneficiary, any CGT they may have to pay will be based on the difference between the market value at the time of death and the value at the time of disposal

For further information about the 2018 Budget changes please click here.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM TAXATION, ARE SUBJECT TO CHANGE.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE TAX PLANNING.

TAX TREATMENT IS BASED ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN THE FUTURE.

GENERAL ENQUIRY FORM

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Capital Gains Tax Allowances, Liabilities & Reliefs

In the tax year 2018/2019, an individual's CGT allowance is £11,700 (2017/18 - £11,300).

This means you do not have to pay tax on gains from buying and selling shares or other investments during the tax year up to that amount. You do not normally have to pay tax on any gain you make when you sell your main residence.

2018/2019

2017/2018

For standard rate taxpayers(1)

10%

10%

For trustees and higher/additional rate taxpayers(1)

20%

20%

Annual exempt amount - individuals

£11,700

£11,300

Annual exempt amount - trusts

£5,850

£5,650

Entrepreneurs' relief lifetime limit

£10,000,000

£10,000,000

Entrepreneurs' rate

10%

10%

(1). These rates do not apply to transactions involving residential property (the sale of second homes) or carried interest (the share of profits or gains that is paid to asset managers). CGT rates for these transactions remain at 18% (standard rate taxpayers) and 28% (higher rate taxpayers).

If you have used your CGT allowance, don't forget your Individual Savings Account (ISA) allowance. Both a 'Cash ISA' and a 'Stocks and Shares ISA' can shelter capital gains on investments, for example unit trust holdings, worth up to £20,000 per year.

From 6th April 2008 Taper Relief was removed and a new relief called 'Entrepreneurs' relief' was introduced to reduce the Capital Gains Liabilities on the disposal of certain business assets.

CGT is a tax on capital 'gains'. If when you sell or give away an asset it has increased in value, you may be taxed on the 'gain' (profit). This doesn't apply when you sell personal belongings worth £6,000 or less or, in most cases, your main home.

When do I have to pay CGT?

You may have to pay CGT if, for example, you:

sell, give away, exchange or otherwise dispose of (cease to own) an asset or part of an asset

receive money from an asset - for example compensation for a damaged asset

You don't have to pay CGT on:

your car

your main home - provided certain conditions are met

ISAs

UK Government gilts (bonds)

personal belongings individually worth £6,000 or less when you sell them

betting, lottery or pools winnings

money which forms part of your income for income tax purposes

Important Considerations:

if you are married or in a civil partnership and living together you can transfer assets to your husband, wife or civil partner without having to pay CGT

you may not give assets to your children or others or sell assets to them cheaply without having to consider CGT

if you make a loss you may be able to make a claim for that loss and deduct it from other gains, but only if the asset normally attracts CGT

if someone dies and leaves their belongings to their beneficiaries, there is no CGT to pay at that time - however if an asset is later disposed of by a beneficiary, any CGT they may have to pay will be based on the difference between the market value at the time of death and the value at the time of disposal

For further information about the 2018 Budget changes please click here.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM TAXATION, ARE SUBJECT TO CHANGE.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE TAX PLANNING.

TAX TREATMENT IS BASED ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN THE FUTURE.

GENERAL ENQUIRY FORM

Marketing Information

Submit your Information

From time to time, we would like to contact you with details about our services, products, business updates and events. If you consent to us contacting you for this purpose please tick to say how you would like us to contact you:

How should we contact you?

Email

Telephone

Post

Yes please, I'd like to hear about offers and services.

No thanks, I don't want to hear about offers and services.

Please tick this box to confirm you have read and understood our privacy policy.

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